Another increase in the pump price of petrol may be under way given the strident concern being expressed by top government functionaries over the rising price of crude oil in the international market and what they call the concomitant rise in government subsidy on petroleum products.
The Vice President, Dr. Goodluck Jonathan, made a veiled reference to the issue yesterday at the opening of a conference organised by the Senate Committee on Petro-leum Resources (Down-stream) in Abuja.
But the Federal Govern-ment said that there would be no increase in prices of petroleum products without due consultation with stakeholders.
The government also said the December 31, 2007 deadline for the nation�s refineries to work at full capacity was no longer feasible.
Represented at the conference by the Minister of State for Petroleum, Mr. Henry Odein Ajumogobia, the vice president said subsidies being paid by the Federal Government on imported petroleum products were on the increase.
�The December deadline for repair of the refineries is no longer feasible. We all know that we buy fuel at the fuel station at N70 per litre. It used to be N65; there was an attempt to increase the pump price to N75; we all know the result of that and government went back to the compromise pump price of N70,� he said.
According to him, �Today, the price of crude oil is hovering very close to the notional $100 mark. I don’t know why it is the $100 that we picked as the significant mark but, it is the mark everybody is afraid of. It has not yet got there, but it is there. The retail price of petroleum products inevitably tracks the price of barrels of crude in the international market. If the price of crude gets higher so does the price of petroleum products that we import to the country. It means that the amount of money that government pays on subsidy increases with the price of crude. It also means that as long as petroleum prices are regulated in our country, those who may have an interest in participating in the downstream may have a constraint.�
He continued: �No one invests in a business if he does not see how he is going to get his returns; his returns come from current pump price and subsidy that government pays through the instrumentality of the PPPRA (Petroleum Products Pricing Regulatory Agency) and the Central Bank of Nigeria (CBN) where the money for the imported price is paid to the importer.
�Is that scheme sustainable into the future given the volatility of the prices? These are the things the conference should debate on and come up with solution.�
But speaking in an interview with journalists at the end of the opening of the conference, Ajumogobia said any increase in pump prices of petroleum products would be subjected to due consultation with all stakeholders.
He said �the outcry by government does not imply increase in fuel prices, but President Umar Musa Yar�Adua is keeping faith with his contract with Nigerians.�
In his opening remarks, Chairman of the Senate Committee on Petroleum Resources (Downstream), Senator Emmanuel Paulker, decried the near prostrate state of Kaduna and Warri refineries.
He also said the Port Harcourt refinery was epileptic in performance and noted that it was no longer tolerable that Nigeria, an oil-producing country, should continue to import 100 per cent of petroleum products used in the country.
According to him, �Although, this sub-sector (downstream) has tremendous investment by the government, it is characterised by non-functioning refineries, collapsed products distribution infrastructure caused by vandalism and lack of maintenance, insufficient domestic gas supply and distribution system, products hoarding, adulteration and over-pricing in some states of the federation.�
Nov292007